can someone plz explain what the differences are between the BO, FO, and MO. Which of these would the following role be under: Conducts risk modeling to analyze customer behavior assumptions that are inputs in the bank’s hedging and pricing models. (For example, analyzing the prepayment risk on mortgages, analyzing how many will prepay regardless of what happens to interest rates, how many are rational and will only prepay when rates are low). (Or, analyzing the risk of embedded options on Term deposits, and how customers react to these options).
This is a retail banking gig right? If it is, this seems to be more of the MO stuff to me. It’s better than being a teller or a private banker imo. But is this all of the job description? I’m guessing, possibly incorrectly, that they are going to have you also do a good amount of admin work. The following are loose generalizations that explain the differences between BO, MO, and FO as I’ve come to understand the terms. Each firm is different and some tasks will overlap between these 3 areas. BO = Back Office Handling account reconciliation, processing forms, working with various partner companies to get the little logistical details of transactions done, no client contact, 9-5, repetitive work, etc. MO = Middle Office Usually doing a lot of the back office stuff but slightly a step above. A lot of times you’re working directly with the FO people and acting as a liaison between FO and BO. You might also execute trades, do some analytical work (usually complete this or that template) but nothing too fancy. FO = Front Office “Prime time” work, not as much administration, working on the deals and making investment decisions, working on the modeling, client contact, higher salaries, etc.
Teller is front office, right?
thx a lot topher! It is a retail banking gig. Its actually my current position that i started recently, I just wasn’t sure what it falled under in terms of BO, FO, and MO.
Jimjohn, sounds like a respectable position, it can probably fall under a ‘middle-office quant’ heading if you are actually developing new prepayment models (a nontrivial task involving a good amount of econometrics), or under just ‘middle-office’ if you are just running spreadsheets/programs to refresh existing models with new data.
“Teller is front office, right?” You get a great opportunity to work with many of the bank’s clients.
edmund_lord Wrote: ------------------------------------------------------- > “Teller is front office, right?” > > You get a great opportunity to work with many of > the bank’s clients. sarcasm detected
“analyzing the prepayment risk on mortgages, analyzing how many will prepay regardless of what happens to interest rates, how many are rational and will only prepay when rates are low” This sounds like a front office role to me. I don’t have any experience that involves middle office people analyzing prepayment risk.
thanks guys! i should give more detail. i do develop new prepayment and other quantitative models using regression and trend analysis. i do use a lot of econometrics. these are models to analyze customer behavior for term deposits withe mbedded options and for early prepayment on mortgages. then i present these findings to the ALCO (Asset Liability Managemetn Committee), and they decide whether or not to implement the changes recommended to the hedging and pricing models. so i guess this would be classified as Middle Office quant?